Hims & Hers Shares Under Pressure Following Analyst Downgrade

Hims & Hers US4330001060

Shares of the telehealth provider Hims & Hers Health are facing sustained selling pressure. A pessimistic assessment from Bank of America has added to recent declines, casting doubt on the company's ambitious growth trajectory for the coming year and its ability to meet targets amid rising investment costs.

The latest downturn was triggered by Bank of America Securities, which on Wednesday lowered its price target for the stock to $29 from $32, reiterating its "Underperform" rating. Analyst Allen Lutz expressed significant skepticism regarding Wall Street's consensus estimates for 2026. The market currently anticipates revenue growth of $440 million during that period—a hurdle the bank considers too high given the firm's current growth rates.

Further concerns were raised about potential margin pressure. The bank characterized 2026 as an intensive investment year, with likely increases in spending on personnel, technology platforms, and the supply chain. Lutz described current market expectations for EBITDA margins as "excessively optimistic," forecasting negative earnings revisions in the coming months.

Regulatory Hurdles and a Divided Street

Beyond financial metrics, regulatory uncertainties are weighing on sentiment. The U.S. Food and Drug Administration (FDA) issued warnings in September 2025 regarding the marketing of compounded weight-loss products. Furthermore, the company's sale of "personalized" versions of semaglutid operates in an area experts describe as a legal gray zone.

Analyst opinions remain sharply divided. While firms like Barclays and BTIG maintain extremely bullish outlooks with price targets as high as $85, Citigroup and Bank of America warn of further risks with targets around $30.

Stock Performance Reflects Mounting Concerns

Investor reaction has been pronounced. Between January 7 and 9 alone, the stock lost 10.6% of its value, closing Thursday at $31.69. This drop extends a longer-term downward trend; the share price has more than halved from its 52-week high of nearly $73.

Recent trading volume has been notably above average, indicating heightened distribution pressure. Technically-oriented investors are now watching the annual low of $23.97 as a potential level of support should the $31.66 mark fail to hold.

Upcoming Earnings to Provide Crucial Insight

Clarity on the operational outlook will come with the release of fourth-quarter and full-year 2025 results, expected in late February. With an expected forward P/E ratio of 54 based on current estimates, the stock remains ambitiously valued compared to the industry average of 23x. Investors will be watching closely to see if management can translate investments in international expansion and AI applications into sustainable, profitable growth.